We are trying to create a report of all the contacts we have in our database. Right now we are unable to include those contacts that do not have an account in an All Contacts/Accounts report. Is this possible?
Yup, but you need to be able to make a Custom Report Type to make this happen. Not sure if all editions support this feature (Enterprise and up does). Setup>Create>Report Types ... pick "Contacts" as your primary object and you're done.